Microsoft is expanding Copilot beyond the short interactions we’re used to today. Alongside asking questions, summarising meetings and creating content, the next generation of Copilot can take on longer-running tasks, work across applications and, increasingly, complete pieces of work on your behalf.
Those two types of AI have very different computing requirements. Microsoft is therefore moving towards a model that combines the existing user subscription licence (USL) with usage-based billing (UBB) for some of these more advanced services.
From 1st December 2026, that change becomes particularly relevant to businesses buying Microsoft 365 Copilot Business through a Cloud Solution Provider (CSP) such as Node4.
From 1st December, purchasing a Microsoft 365 Copilot Business license through CSP will enable usage-based billing within your tenant by default.
This applies to new Copilot Business subscriptions, but also to other transactions, including adding Copilot Business seats to an existing subscription or upgrading to a license that includes Copilot Business. Where the change is triggered, the usage policy applies at the tenant level to all existing Copilot Business licences as well as the newly purchased seats.
Microsoft will automatically put the supporting Azure subscription and default spending policy in place. Previously, partners or customers had to configure much of this separately before they could use consumption-based Copilot services.
The default spending limit is 4,000 Copilot Credits per user, per month, equivalent to approximately $40 USD per user per month.
For example, if Sarah has a Copilot Business licence with the default policy applied, she doesn't automatically generate another $40 bill every month. Charges are generated when she uses services covered by usage-based billing, up to the limit configured for her. The spending policy itself doesn't provide 4,000 free credits.
Also, importantly, if the business Sarah works for moved from 99 to 100 Copilot Business licenses after 1st December, the default credit limit across the tenant will be $4,000 USD per month.
The simple answer is that asking Copilot a question and delegating a substantial piece of work to it aren't the same thing.
The existing user subscription continues to cover Microsoft's everyday Copilot experience, including Copilot Chat and Copilot across Microsoft 365 applications. Microsoft is then using consumption-based Copilot Credits for additional experiences that can involve more advanced models or longer-running agentic work.
This is where some of the more interesting things Microsoft is doing with Copilot start to appear.
Copilot Cowork, for example, allows you to delegate a task rather than simply ask a question. Cowork can break a goal into steps, select the appropriate tools and models and return completed, editable work.
There are also Work IQ APIs. Work IQ is the intelligence layer that helps Copilot understand your business's people, meetings, content and activity. Work IQ is part of the Copilot experience, while its APIs let custom applications and agents use that business context. The APIs are one of the services covered by usage-based billing.
Then there are new capabilities such as Copilot Code and Autopilot.
Code is designed to let people turn natural-language ideas into applications, dashboards and automations. Autopilot goes further, providing an always-on personal agent that can work across Microsoft 365 tools and carry work forward on your behalf. These capabilities are currently being introduced through Microsoft's Frontier programme and form part of the direction of travel for usage-based Copilot services.
So, the distinction is becoming fairly simple: the licence gives you Copilot to work with; usage-based services allow you to give Copilot work to do.
It could, if there were no controls around it. Fortunately, there are.
Microsoft's cost management approach allows administrators to control who can use usage-based services, which services are available and how much users can consume. There are also spending limits, alerts and reporting so businesses can see where Copilot Credits are being used.
Users aren't completely blind to this either. Microsoft is introducing credit visibility so that users can see consumption, receive alerts as they approach their limits and request additional credits where appropriate.
More importantly, you don't have to accept Microsoft's $40 default.
The spending limit can be changed to suit your business. Usage-based services can also be disabled, including by setting the spending limit to zero.
For some businesses, enabling these capabilities broadly will make sense. For others, starting with a limited set of users or use cases and expanding once the value is understood will be the more sensible approach.
We don't think the right answer is simply to switch everything on. Equally, switching everything off because "usage-based" sounds unpredictable could mean missing some genuinely useful capabilities.
The better approach is to understand what has changed, decide which capabilities make sense for your business and put sensible financial controls around them.
For Node4 customers affected by the December change, we'll proactively help review the usage-based billing configuration and spending policy. That includes making sure the limits applied to your business reflect how you intend to use Copilot rather than simply accepting the Microsoft defaults.
We're also offering customers a session covering the latest Copilot capabilities. We'll look at what's already included within the Copilot licence, what sits behind usage-based billing and where newer capabilities such as Cowork, Work IQ APIs, Code and Autopilot could realistically fit within your business.
Copilot is getting considerably more capable. The commercial model is changing with it.
The important bit isn't whether you spend $40 per user. Most customers won't want every user consuming the same amount. The important bit is having the option to use these capabilities where they create enough value to justify the consumption and having the controls to stop spending where they don't.
If you're already buying Microsoft 365 Copilot Business through Node4, we'll help you prepare for the change. If you're considering Copilot, speak to the Node4 team and we'll take you through what the new model means for your business.